What Is Decentralisation and Why Is It Important?

4 min readMay 2, 2018


What Is Decentralisation?

Decentralization is the process of redistributing or dispersing functions, powers, people or things away from a central location or authority.

Bitcoin is a decentralized Peer-to-Peer network that does not rely on a central authority. Any peer of the network is not dependent on any single node for the correct blockchain. Bitcoin works as long as each peer is connected to a single peer telling the truth, even if every other is lying. This is the key feature that distinguishes Bitcoin and Crypto from other networks, that rely on trusted entities for determining truth.

Why Does It Matter?

To understand why decentralization matters, it’s important to know the flaws that a centralized system has. Decentralization is not cheap, as it requires an expensive (but valuable) proof-of-work mechanism for determining consensus. While transaction fees currently are cheap, the security provided for such transactions is not cheap, as a great deal of it is paid through inflation. This will change, with time, and the true costs will be exposed, or security levels will not match what currently exists. Crypto and other decentralized services would lose in competition to centralized services if there were not significant advantages to a decentralized system that offset this cost.

Further problems with centralized platforms include a predictable life cycle. When they start out, they do everything they can to recruit users and 3rd-party complements like developers, businesses, and media organisations. They do this to make their services more valuable, as platforms (by definition) are systems with multi-sided network effects. As platforms move up the adoption S-curve, their power over users and 3rd parties steadily grow’s.

When they hit the top of the S-curve, their relationships with network participants change from positive-sum to zero-sum. The easiest way to continue growing lies in extracting data from users and competing with complements over audiences and profits. Historical examples of this are Microsoft vs Netscape, Google vs Yelp, Facebook vs Zynga, and Twitter vs its 3rd-party clients. Operating systems like iOS and Android have behaved better, although still take a healthy 30% tax, reject apps for seemingly arbitrary reasons, and subsume the functionality of 3rd-party apps at will.

How Decentralization Wins

It’s one thing to say decentralized networks should win, and another thing to say they will win. Let’s look at specific reasons to be optimistic about this.

Software and web services are built by developers. There are millions of highly skilled developers in the world. Only a small fraction work at large technology companies, and only a small fraction of those work on new product development. Many of the most important software projects in history were created by start-ups or by communities of independent developers.

Centralised platforms have been dominant for so long that many people have forgotten there is a better way to build internet services. Crypto networks are a powerful way to develop community-owned networks and provide a level playing field for 3rd-party developers, creators, and businesses. We saw the value of decentralized systems in the first era of the internet. Hopefully we’ll get to see it again in the next in new businesses, one such platform is Baanx.com.

Baanx.com — The World’s First Decentralized Blockchain Crypto Bank Network

Baanx.com is an Open Access, Open Source and Open Ownership platform — sharing bank licenses between Cryptobanks.

They are a Cryptobank with a difference, allowing qualified businesses, individuals, banks and charities to launch their own Cryptobank on the platform using rules based, smart contracts.

Baanx.com puts the end user in full control of their money, a trait the financial sector does not offer right now. With digital currency, there is no need to trust a third party for safekeeping one’s money. People can become their own bank and carry their cryptocurrencies with them wherever they go.

Baanx.com will deliver huge change to the market and disrupt traditional banking by scaling the size of the Cryptobank network to levels big enough to rival the established financial services sector. Their mission is to bring daily use of Cryptocurrencies to the world and create an unopposed banking service for both Crypto and Fiat currencies.

Join the Fight Today!

If you are interested in learning more about the Baanx.com movement then check them out at https://baanx.com and learn how you can support change in banking, decentralisation and open source, open access and open ownership for Cryptobanks.

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Written By: Sarah Murray — Baanx Communications Manager